Well, in this case, the alternative is all of Spain intermittently blocking lots of Cloudflare.
But if Cloudflare bows to Spain in this case, every jurisdiction will want to pile up lots of special case rules for Cloudflare to try and implement.
Plenty of companies proactively take action against shady users, even if not 100% required under law. Youtube has content id, social media companies have "community guidelines", and ISPs have AUPs.